Differentiating between Needs and Wants
A need and want have a thread-like difference, and understanding the same creates all the magic. As a youngster, every new thing fascinates us and this is the point where we have to understand the difference between our needs and wants. Invest only in things necessary (need) rather than wasting money on goods that just build up your status in society (want).
Top 10 Financial Tips for Young Adults
The term ‘Finance’, which seems to be complicated to many youngsters is actually very easy to understand. It is nothing but a way someone manages his/her money in such a manner that all the expenditures are met without actually draining out the whole amount. Financial experts technically define Finance as a system of creating, managing, and investing money with a motive to make the best use of the available resources. It is a broader concept that includes currency, debts, securities, and other financial instruments. Finance reveals the future aspects of money as it is closely bonded with ideas of the Time Value of Money, Rate of interest, Accrual Accounting, etc.
Now, let’s understand the most frequently used term by our parents or adults while they teach us the benefits of saving and investing the moment we start earning. Such suggestions seem annoying to most of us but actually are a lesson for life. Personal Finance is one of the branches of Finance that specifically define and study the financial decisions taken by an individual. Personal Finance analyses the various financial activities of an individual and helps an individual to manage their finance effectively with minimum risk factors. This branch of finance helps individuals to understand their short-term and long-term financial needs to prepare their budgets and plan their savings, investment, and other financial activities. Besides this, Personal Financing also cut downs the risk associated with individual financing activities by suggesting proper insurance coverage. It inserts the knowledge of tax filing and tax returns among individuals. Since it inculcates proper knowledge of saving and investing, the retirement of an individual is secured. In simple language, Personal Finance is a way one manages the finance to meet all the present expenditures along with saving money for making the future secure. It is an art learned with time.